We are looking at this backwards. These mortgage companies wouldn’t do this unless it was in THEIR interest. They are not charities. They are all on the edge of bankrupcy and need every dime they can get. And their shareholders would sue in a second if they were giving something away.

The companies are agreeing to this because taking a 15% lower monthly payment for the next few years creates a lot smaller loss then foreclosing today and showing an immediate 50% loss on the loan.

What the governator has really is locked a bunch of FBs into debt servitude for a little longer. Folks with bad loans on overprices properties should walk away. Maybe fewer will now.